Myer achieved record sales of $3.36 billion in the 2023 financial year, and also a net profit after tax of $71 million.
👉 Background: Myer is one of the OG department stores in Australia. When it listed on the ASX in 2009, its market cap was $2.3 billion. But during the peak of COVID, it dropped to a measly $90 million.
👉 What happened: Now, Myer's major turnaround strategy has started to deliver the results they hoped. Myer achieved record sales of $3.36 billion in the 2023 financial year, and also a net profit after tax of $71 million.
👉 What else: Myer believes its first-half results this year will be pretty similar to last year (-3%). As a result, its share price jumped 18%. But to maintain this high level of sales, Myer has done some major discounting, which is hurting their profit margin.
💡In the retail world, growing sales and also maintaining your profits is like walking a very unstable tightrope.
💡When a retailer runs big promotions and big discounts, it gets people through the doors or clicking away online. But, those same promotional deals can ruin the retailer's profit margins.
💡In the first half of 2023, Myer had a net profit after tax of $65 million. But in the first half of 2024, they're only expecting a net profit after tax of around $50 million or roughly a 23% decrease in net profit year on year. So clearly, they've taken a big hit.
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